Local entrepreneur sentenced for fraud
A Los Altos tech entrepreneur is being sentenced to a year and a half in prison for baiting investors with inflated and misleading financial information about his company.
Prosecutors said Friday HeadSpin Inc. founder Manish Lachwani, 47, was sentenced following his conviction last year on wire and securities fraud charges.
Lachwani’s company, which accesses remote devices to test mobile applications, raised more than $100 million from investors between 2017 and 2020.
To get financing, Lachwani overstated information about the company’s revenue and customers, prosecutors said.
Prosecutors said Lachwani admitted he sent potential investors financial information that he knew overstated HeadSpin’s revenue and annual recurring revenue (ARR), a measure of a company’s subscription revenue rate.
According to the U.S. Attorney’s Office, Lachwani admitted he knew the revenue and ARR figures he provided to investors were overstated because they included amounts from potential customers that had not agreed to pay subscription fees to HeadSpin, amounts that were more than real customers had agreed to pay. He also included amounts from customers that had stopped using and paying for HeadSpin’s services.
Lachwani also must pay a $1 million fine and serve three years of supervised release after prison time. A hearing is scheduled July 31 to address the issue of restitution.
Recount ongoing in 16th Congressional
Recounting ballots in the wild 16th Congressional District race continued last week amid assertions of at least 20 uncounted ballots that would have broken the unlikely tie between candidates, Joe Simitian, Santa Clara County supervisor, and Evan Low, state Assemblyman.
Low and Simitian, representing Los Altos, Los Altos Hills and Mountain View as a District 5 supervisor, ended up tied after March 5 primary election ballots were counted. They finished with 30,249 each. Former San Jose mayor Sam Liccardo finished first in the race.
Jonathan Padilla, who has strong ties to Liccardo and initiated the recount, told local news media that 20 ballots had been “improperly excluded from the count.”
Low’s campaign has asserted that Padilla was working on behalf of Liccardo in an attempt at a less competitive election. Lacking a recount, three candidates would have competed in the Nov. 5 general election.
